Offices – A new sense of purpose
It was a significant adjustment when millions of workers were forced to pivot to remote work at the start of the Covid pandemic. Three years on, Covid 19 has now been removed from a health emergency status by the World Health Organisation, and businesses across the globe are evaluating the purpose of office spaces. The principal question? How to tackle the challenge of retaining flexibility for staff whilst restoring a degree of regular office presence.
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A return to normal?
Since its inception, the Knight Frank Cresa Global Corporate Real Estate Sentiment Index has consistently shown that global occupiers have little expectation of an imminent return to pre-pandemic office occupancy levels. Occupiers have recognised that amid a great global workplace experiment, the prudent thing to do has been to evaluate recent experiences within their business and use those to shape future office requirements. These signals have been further strengthened by a steady rate of office reoccupation, which now stands at an average of 40% across the UK.
Is the corporate stance hardening on flexible working?
Some organisations are moving towards an office-first stance through a mandated return to the office 4-5 days per week. Many financial institutions seek to enforce a traditional office presence through disciplinary action. Even Twitter has enacted a very public change from being a leader in modern working practices, aligned with others in the technology industry, to a traditional, office-centric organisation.
The current macroeconomic environment may also play a role, at least short term. With high inflation, rising costs and uncertainty, employees may feel more vulnerable in jobs and feel compelled to attend the office more regularly. Presenteeism is the first reaction to job risk.
While mandated office presence can appear effective as a short-term fix to utilise existing footprints, the long-term effect on staff satisfaction, attraction and retention is yet realised. It could prove costly if a desired work-life balance is not achieved.
A softer approach, longer term?
A key consideration for occupiers will be the purpose of the office space they hold and any subsequent reaction against traditional configurations. The office will be a place for connection, collaboration and galvanising corporate culture, which the remoteness of the pandemic experience has dented.
When it comes to their workplaces, employees increasingly want spaces that support how they like to work. Socialisation is an important aspect of office life and can't be achieved when working from home. Providing multipurpose collaboration areas that encourage interaction between co-workers can help create a work environment which people actively enjoy.
The office is just one workplace setting, though in workplace strategy. Employees will be given a greater choice as to which location is most appropriate to the task that they are set. The office is one of those choices, but home, serviced space, café, libraries and other digitally connected places are all now part of the equation. Enabling greater choice in how and where people work improves workplace satisfaction, with studies showing that satisfied employees are up to 10-20% more productive.
Occupiers collaborating with landlords must create a workspace that compels staff to invest financially and emotionally in their commute. Emphasis will be on the experience. Office as a choice means the workplace experience needs to be high quality and supportive of productivity. Landlords will no longer be able to sufficiently differentiate based on having a well-designed physical product. A soft service layer to supplement the environment and stand out is required. The extensive business park and campus-style office market in the South East is a good example of embracing 'destination creation' through environment and services.
So, what does this mean for offices?
Spatially interesting 'branded' buildings are likely to be increasingly in demand, as many organisations seek to create 'destination' workplaces to tempt workers back to the office.
The flight to quality will be discernible as occupiers seek spaces to support innovation, creativity and collaboration. This may be offset by a slight reduction in required size and the dispersal of some parts of businesses to lower-cost locations.
Quality and amenities are king. Amenities are no longer just 'nice to have' but a reason people will come to an office. Amenity, either on-site or nearby, will play a more fundamental role in defining the desirability of a space.
A particular focus will be given to amenities that support wellness, such as exercise facilities and meditation space. For example, introducing domestic type space, including biophilia and artwork, is gathering favour. Investing in employee well-being can increase resilience, boost employee engagement, reduce sickness absence, improve performance and productivity, and encourage employees to return to the office to take advantage.
With the reliance on technology growing across industries, good digital connectivity, both within the building envelope and outside, is a prerequisite. Connectivity to diverse fibre routes and data centres is essential, not purely to technology-derived businesses. This is a complex area, and many organisations invest heavily in online, virtual and augmented reality tools to enable employees to work together effectively, regardless of location.
Occupiers will need more flexible space, which aligns with the uncertainty in the broader operating environment. This will increase opportunities for landlords to partner with operators to create a flexible, serviced and managed experience alongside a more conventional office product.
Final Word
Some of the mainstays and orthodoxies of pre-pandemic life are undergoing a fundamental re-evaluation, whether it is the structure of the working week or day, the balance between work and personal life, the effect of our working lives on our mental and physical health, the sustainability of commuting, or the office as the central place of work, all are in the analytical spotlight.
Businesses are more concerned with employees' social, physical and psychological well-being. An initial heightened focus on managing people's safety during the lockdown has morphed into supporting the transition to a new era of flexible work that supports physical and mental health.
Part of this will include ensuring that the office constitutes a healthy and productive environment that offers tangible benefits to those working there. Post-pandemic, there is a significant opportunity to rebuild and redefine the office's role in enhancing our working lives by offering better amenity provision and creating healthier workplace cultures.
Undeniably, workstyles are going through an unprecedented change, which will influence the quantum and qualities of workspace required by occupiers. The dynamics are shaping corporate mindset, market dynamics & what the office of the future looks like. It's a process of rapid evolution but not revolution.